When it is passed, it will be the biggest bilateral trade deal in the history of mankind - and it will barely warrant a mention outside of the business pages.

It's called the Transatlantic Trade and Investment Partnership (TTIP). Inside it is an innocuous-sounding provision called the 'investor-state dispute settlement'. This allows private companies to sue nation states if they feel a law lost them money on their investment.

Let's say a future government decides, not unreasonably, that the involvement of US firms in the NHS is a bad idea. Each and every one of them will now be able to launch expensive legal battles, potentially for billions of pounds, in the name of foregone profits.

If passed it would enforce privatisation in international politics, making it financially ruinous for EU countries or the US to introduce any legislation which was not in the interests of corporations.

You would have thought that British eurosceptics, who claim to care so much for national sovereignty, would object to a system which hands private companies so much power over nation states. But it is hard to find any mention of the plans in parliament or the press.

While Tory backbenchers rant and rave about judgements from European courts, they totally ignore the creation of a parallel international legal structure enforcing the rights of corporations over those of national parliaments.

But European leaders, at least, are starting to get jittery about the move.

During a trip to Washington this month, Socialist French president Francois Hollande encouraged negotiators to go fast. "Otherwise we know that there will be an accumulation of fear, of threats, of convulsions," he warned. European leaders fear people realising what's going on.

The French do have concerns about the deal but they are of the parochial Gaelic variety. They want an 'exception culturelle' to protect their creative industries from Hollywood and for the French farming lobby to be given everything it wants. The prospect of internationally-mandated privatisation does not appear to bother them.

Nevertheless, something spooked the negotiators. There was a meeting last week between European trade commissioner Karel De Gucht and his US counterpart Michael Froman for "political stock-taking" – code for salvaging what they can and jettisoning that they cannot. The European Commission has announced public consultation on the investor dispute settlement.

Don't be optimistic. Officials from the World Development Movement who have been following negotiations are convinced the commission is intent on securing the settlement. This is a manoeuvre, not a sign of victory. But the consultation can still be used to signal discontent ahead of a fourth round of negotiations in early March and a visit to Brussels from Barack Obama later in the month.

Once finalised, the deal would go next to the Trans-Pacific Partnership, which would cover the other side of the world with similar laws. This is a global attempt to fundamentally alter the relationship between corporations and nation states.

It's not a new development. It is the coup-de-grace. This process has been happening for some time.
Provisions for investor-state dispute settlements are embedded in a number of pre-existing bilateral investment treaties, international trade treaties and international investment agreements. In fact, there are over 1,400 bilateral investment treaties since the 1950s by EU member states, many of which allow companies to sue governments.

Contrary to expectations, European investors are actually more prone to litigation than their US counterparts. That being said, US firms are likely to use the mechanism to lower EU safety standards, particularly on food. They will push for continental consumer standards to be 'standardised' down to put them in line with the US.

The damage done by these measures has been staggering. They are a weapon against progressive politics.

Quebec has been hit by a $250-million (£134 million) damage suit after it introduced a moratorium on fracking.

Swedish energy firm Vattenfall has filed a request for arbitration at the International Centre for the Settlement of Investment Disputes, after Germany turned its back on nuclear power. It wants €3.7 billion (£3.04 billion).

But the juiciest targets are in the developing world, where corporations use investor legal rights to pose an existential threat to any nation state which interferes with the private sector.

Ecuador would face bankruptcy if it complied with investor judgements against it, not least a World Bank arbitration tribunal award to the Occidental Petroleum Corporation which granted it damages of $1.77 billion (£1.06 billion) because its operating contract was cancelled.

Argentina has faced even worse bullying and intimidation for trying to protect its citizens.

In July 2006, the International Centre for Settlement of Investment Disputes awarded Azurix, the water division of the disgraced Enron Corporation, $165.2 million (£99 million).

The company had gained exclusive rights to provide water and sanitation services to the province of Buenos Aires for 30 years. They behaved in a way typical of private firms delivering public services: They tried to ratchet up the price. The decline in water quality was so severe customer had to boil it before drinking.

Their response was to sue the government, citing a US-Argentina bilateral investment treaty. The treaty mentioned investors' right to "full protection and security" – a description which the court decided related not just to physical security but also a requirement that the government ensure the "stability afforded by a secure investment environment". In other words: You can do what you like, as long as you never mess with capital.

Argentina's attempt to freeze energy and water prices following the devastating 2001-2002 economic crisis saw it punished by corporations. The country has been sued more than any other country in the World Bank's arbitration court. This was the price it paid for trying to help its citizens.

That World Bank arbitration court will probably be used to enforce the US-EU treaty too. Or an investor panel will be created out of scratch. Or it will rely on a series of ad hoc arbitration tribunals. Whichever avenue they pursue, the final result will be the same.

There is a list of legal practitioners who have already been asked to take part. They come mostly from commercial law, which provides a hint as to their sympathies.

The corporations will have their representatives there, but where will the representatives of the European and American public be? Who will speak up for consumers benefitting from frozen energy prices? Who will speak up for those who have been treated decently by publicly-owned health or education services, who have enjoyed better food hygiene standards, who desired the environmental safeguards of conscientious governments?

They will be nowhere to be seen. Only the money gets a voice.

The mechanism this trade deal creates will bring many more cases into arbitration. It will have even greater weight and scope than existing investor agreements. It will set up a parallel legal structure making judgements not on precedent but on an almost mystical approach to contract law.

The arbitration service is supposed to deal with investors who feel they have lost money due to a government decision. But they can argue their case on the basis of omission as well. They can say they invested because of the absence of a certain law which was later imposed and then sue for foregone profit. That development –expected by many observers – would effectively amount to the outlawing of nationalisation.

Even where the government wins a case, it will provide a legislative freezing effect, strongly discouraging any state from interfering in the market.

It is a thuggish financial threat against any and all left-wing policy-making. It is an affront to national sovereignty. And it is being established with barely a squeak of protest.

Ian Dunt is editor of Politics.co.uk

The opinions in Politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.